Equity Insights
By Sithembile Bopela
For South African investors, diversifying portfolios with international assets remains a key strategy for enhancing returns and reducing risk. FNB's exchange-traded noted (ETN) platform continues to simplify offshore investing, offering exposure to global companies, sectors, and geographies directly through the Johannesburg Stock Exchange (JSE). This month, FNB is launching five new ETNs, broadening the range of options for local retail investors seeking global diversification.
New ETN Listings
Advanced Micro Devices (AVETNC/AVETNQ)
Advanced Micro Devices (AMD) is a leading global semiconductor company, renowned for its high-performance computing andgraphics solutions. The company is at the forefront of innovation in central processing units (CPUs), graphic processing units(GPUs), and AI accelerators, serving data centres, gaming, and embedded markets. AMD's growth is driven by strong demand for AIinfrastructure and continued market share gains in server and client segments. The stock is trading at a premium to its own historyand peer average over time, reflecting its strong near-term fundamentals, particularly accelerating server CPU demand, risingaverage selling prices, and a doubling of its addressable market, which underpin robust earnings growth and leadership in next-generation chip technology.
MSCI Emerging Markets Index (MMETNC/MMETNQ)
This ETN tracks a diversified basket of leading companies across emerging markets, offering exposure to economies with high growth potential and structural tailwinds. The basket includes firms from Asia, Latin America, and Europe, the Middle East and Africa (EMEA), spanning sectors such as technology, financials, consumer goods, and energy. Investors benefit from broad diversification and access to regions that are often underrepresented in traditional portfolios. The ETN provides a cost-effective way to participate in emerging-market growth trends.
MSCI Japan Index (JAETNC/JAETNQ)
The MSCI Japan Index ETN offers exposure to a broad range of Japanese companies, covering large and mid-cap stocks across multiple sectors. Japan's equity market is characterised by world-class manufacturing, advanced technology, and a renewed focus on shareholder returns. The ETN enables investors to tap into Japan's economic resilience, corporate governance reforms, and innovation leadership. The index is trading at reasonable valuation multiples, with improving earnings momentum and attractive dividend yields.
MSCI World Ex USA Index (MUETNC/MUETNQ)
This ETN tracks the MSCI World Ex USA Index, providing access to developed markets outside the United States (US). The index includes companies from Europe, Asia-Pacific, and Canada, offering broad diversification across sectors and geographies. Investors gain exposure to global leaders in healthcare, industrials, consumer goods, and technology. The ETN is suitable for investors seeking to balance US-centric portfolios and capture growth opportunities in other developed economies.
EURO STOXX 50 Index (EXETNC/EXETNQ)
The EURO STOXX 50 ETN provides exposure to the 50 largest and most liquid blue-chip companies in the Eurozone. The index covers 20 super sectors such as financials, industrials, consumer staples, and technology, representing the economic core of Europe. Investors benefit from access to established multinational firms with strong balance sheets and consistent dividend policies. Europe is at the forefront of themes such as energy transition, sustainability (ESG), advanced manufacturing, and green technologies, making the region thematically well placed for long-term trends.
Unpacking ETNs
An ETN is a type of security issued by a financial institution. It tracks the value of a basket of shares or individual shares. The ETN's price fluctuates based on the underlying instrument's performance. For example, if an LVMH ETN is purchased, the price of the ETN will increase based on the performance of the LVMH share itself.
Investors do not physically own any shares; however, they obtain exposure to the company's performance based on the fluctuating ETN price. The better the company performs, the higher the price of the ETN and the more profit investors will make.
Each company can be accessed through a "Compo" option - which tracks the rand-based share price, and "Quanto" option - which tracks the US dollar-based share price. The Compo share price will reflect the movements of the rand relative to the dollar and will outperform the Quanto option when the rand is weakening and underperform during periods of rand strength.
Advantages of ETNs
Risks of ETNs
For comprehensive assessments of the underlying companies and indices, please look up our individual research reports on the FNB Investment Insights Portal or the FNB SPM website https://shares.fnb.co.za.
